Mikhail sklyarov. metro c&c

Benefits of electronic invoice
MADE TO TRADE . Mikhail Sklyarov Head of finance division METRO Cash & Carry Russia

METRO Group structure at a glance MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010
International, high-performing retailing company
Successful DAX-30 enterprise
About 2,100 locations in 32 countries
Approx. 300,000 employees from 150 nations
Operational strengths of the four sales divisions
Metro Cash & Carry: self-service wholesale
Real: hypermarkets
Media Markt and Saturn: consumer electronics stores
Galeria Kaufhof: department stores
Active real estate management with independent profit centre
Focused on profitable growth as well as sustainable and consistent value enhancement

METRO Cash & Carry Russia MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Key facts: Operative: Sales 2009, EUR Employees Stores 52 13.000 2.6 bn 2001

Content MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Implementation of e-invoice 1 Benefits of e-invoice 2 E-invoice as part of EDI 3 4 Summary

1-3 thousand hectares of forest is cut each year to produce paper for VAT invoices MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010

The weight of this paper is 300 tons
To store this paper we need 1000 pallets or 30 trucks or 5000 sqm warehouse
Official requirement is to keep documents at least 5 years
MCC RU store 60 million pages of VAT invoices per year MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010

Comparison of e-invoice and paper process MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 ERP system Invoice Documents receiving EDI invoice EDI provider ERP system EDI invoice ERP system ERP system Retail company Supplier Invoice control Paper Process Retail company Supplier EDI Process

Benefits of e-invoice MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Paper invoice E-invoice Document delivery - + Lost paper invoices - ++ Invoice entry - ++ Invoice check and approval - + Time for invoice processing - ++ Invoice storage - ++ Master data quality - ++ Investment + -

Cost comparison for invoice processing MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010

MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010
Electronic document is not changeable
Secure access to the information for Tax inspection
Checking of electronic data is faster and more convenient than checking of paper invoices
Protection of environment
Modernization and competitiveness of the economy
Government Electronic document flow implementation will bring significant benefits both for business and for Government:

EDI advantages MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Electronic document flow implementation will bring significant benefits both for business and for Government: Business
Invoices are issued electronically, less efforts and mistakes for document creation
Fast exchange of information
Nearly no cost for document delivery
Invoices are processed automatically
The lack of mistakes during invoice entering and processing
Little invoice storage costs

EDI is a standard of electronic message exchange between supplier and retailer MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 ORDERS – Electronic order RECADV – Confirmation of delivery DESADV – Dispatch advice INVOIC – E-invoice * Together with paper 90% 30% 2%* 30% EDI Provider

Country rollout of EDI Invoice MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 RU TR PL DE HU FR PT ES BE UA Germany Live 01/1989 France Live 12/2005 Belgium Live 12/2005 Hungary Live 10/2007 Russia Live 07/2009 Portugal Test 01/2008 Live 02/2010 Spain Test 11/2008 Live 01/2010 Turkey in progress Poland in progress

EDI invoice implementation in Russia (in parallel with paper)
Aim of the project: Implement EDI invoice with suppliers. As soon as necessary law changes are adopted immediately switch to EDI invoice without paper.
MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Current status: 63 suppliers are in production, another 600 suppliers are in test including Kraft foods, Nestle, WBD. Target 2010: receive 5% of the invoices by EDI

EDI process together with paper MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 Paper invoice Supplier Retail chain Invoice payment Input of total data Goods receiving data Store EDI invoice Paper invoice Reconciliation of EDI and paper invoice Archive

Legislation is still an open issue MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 From legislation point of view E-invoice = Paper invoice Make amendments to article 169 of Tax code Make amendments to accounting law

E-invoice pilot with provider Taxcom
The following processes have been tested:
Creation of E-invoice
E-invoice interchange between supplier and customer
E-invoice request by tax office
MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 E-invoice format remained an open issue

E-invoice format should be EDI compatible to be integrated in EDI process MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010 ORDERS – Electronic order DESADV – Dispatch advice RECADV – Confirmation of delivery INVOIC – E-invoice

Summary
E-invoice is a strategic project which is supported by business as well as government
E-invoice brings a lot of benefits for all parties involved
Legislation and data format are main open issues
MADE TO TRADE. Mikhail Sklyarov: June 2010 | © METRO AG 2010

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